On August 1,a company received cash of $9,324 for one year's rent in advance and recorded the transaction on that day as a credit to rent revenue.The December 31 adjusting entry would include
A) a debit to Rent Revenue for $3,885.
B) a credit to Unearned Rent Revenue for $5,439.
C) a debit to Unearned Rent Revenue for $3,885.
D) a credit to Rent Revenue for $9,324.

Question

Quizplus · Accepted Answer

The company received $9,324 for one year's rent, which means $777 per month ($9,324/12). By December 31, five months of rent have been earned (August to December), totaling $3,885 (5 x $777). The remaining $5,439 ($9,324 - $3,885) is unearned and should be credited to Unearned Rent Revenue.

On August 1,a Company Received Cash of $9,324 for One